Flexible Travel? What Airbnb 🏘️ thinks the aftermath will bring vs what it will probably bring...

I’ve been actively speaking to my account manager and the market team to get a sense at the direction to where Airbnb is heading towards in regards to comebacks and recuperation and it’s very troubling the current decision making to “handle the situation” and the planning on how recovery will look like. Granted nobody knows what the sure fire way for an effective comeback is, but, not having one is all the more worrying or maybe they do and don’t want to publicize it which is fair for Airbnb the private company, but, not that much for Airbnb the marketplace.

It’s a pretty interesting scenario the one that Airbnb is traversing particularly, and Expedia in some way with their VRBO section. On the one side Airbnb the private company must maintain profitability and keeping shareholders happy, on the other side they have to keep both sides of the marketplace somewhat happy and willing to continue to participate with hosts getting the short end of the stick them being replaceable and not having and easy out alternative.

In particular to denote Airbnb’s possible lack of vision or maybe even over confidence in the low current alternatives the supply side has it was made known that they are pushing for flexible reservations during this pandemic, which is probably a good idea to incentivize reservations and limit the risk that guest may perceive. But, I was told by the market team that they are advising that people retain the flexible policy even after the crisis is over. I was a bit perplexed because given Airbnb’s stance on host sided matters I don’t think that hosts would think that it would be a good idea. Let’s recap the major decisions that were taken during the pandemic that severely affected hosts

1. Extenuating circumstances - was implemented and it allowed all reservations starting after March 13th to be cancelled with a full refund regardless of the cancellation policy that the host and guest had agreed to upon reserving. This was also applied retroactively (since case managers were so backed up with requests they were very slow to respond to all the cancellations and refunds) meaning that reservation were already getting paid out to the host because the refund needed to be done by a case manager and the platform did not do it automatically. That meant hosts started receiving money to their bank accounts without knowing that Airbnb would comeback to take it because a reservation that was not considered to be eligible to extenuating circumstances was revised and re adjusted to now apply.

2.  Offering hotel stays instead of homes - Yeah, you read right. Reality is that this feature is a way to further use their acquired hotel tonight platform and as a measure of their party prevention strategy. Apparently Airbnb offers users under 24 that are looking to book a last minute accommodation or a next day one to stay in a hotel room since these guests are higher risk and could be looking for a big house to throw a party. But, even though this is a totally separate feature and unrelated to the crisis it did not sit well with hosts that found that their bookings were down and Airbnb was offering a hotel instead of potentially their place.

3. 25% Pity Payout - After hosts were vocal about the extenuating circumstances situation and said that they would go under and Airbnb was set to lose a lot of supply (listings) because of this they decided to “reimburse” hosts 25% of what they would have received under normal circumstances if the cancellation policy would have applied. That’s why I called it a pity payout, communications were promised to hosts early April and guess what they haven’t arrived. Not to mention that if you were paid out one of those reservations that was later revised and you now owe that paid out amount to Airbnb forget about the 25% because this pity payout will be used for that debt that you owe Airbnb.

Honestly hosts feel alone and are now feeling what business is actually like. Beforehand they felt safe and covered under Airbnb’s protective veil but, when things got tough Airbnb did what any other company would do which is attempt to ensure their survival, not yours. They don’t owe you your “business’s” safety or it’s survival they only work for theirs if you survive with them then it’s happy accident or by product.

Now given these three major changes the market team at Airbnb thinks that hosts will embrace flexible travel in the long run (flexible cancellation policies) and I believe that’s wishful thinking. Hosts will not go to offer a full refund up to 1 day prior to arrival on normal circumstances because if something like this were to happen again, the extenuating circumstances policy would decimate then again (regardless of policy), but, if Airbnb resorts to the pity payout technique again then guess how much money you would be entitled to. Yeap, you guessed it, you would get nothing. Because under normal cancellation circumstances you wouldn’t have gotten anything, but, at least your would have the opportunity to rebook those nights with some reasonable probability. In this case, or in our new hypothetical crisis you won’t be able to rebook them so easy or even at all.

This is a very good opportunity to revise your business and ponder if you could really survive with out Airbnb. If the answer is no then you’ll probably not get out of this one, but, if it’s yes then you have a very good chance to re organize and make a solid comeback.

- Gian from Hostpitality